The world of virtual reality has plenty of technical razzle-dazzle but not enough users.
Now Facebook’s closely watched Oculus unit is making a big push to change that. At Oculus’ Connect 4 developer conference, which ended Thursday in San Jose, Calif., the company unveiled new hard- and software that was loaded with fresh virtual experiences and designed with one goal in mind: to get more people into VR.
That’s good news for the retailers and brands that have been experimenting with virtual reality and waiting for the masses to arrive. Some companies, such as Swarovski and Mastercard, have already set up a VR shopping app, and others continue to dabble — from 360-degree videos offering the Fashion Week experience to looks at upcoming products, virtual tours and VR videos. Everyone from Coca-Cola to Adidas seems sold.
“The biggest companies in the world have been looking at VR for a long time, wanting to get in,” said Brian Blau, research vice president at Gartner Inc. “VR and its cousin, augmented reality, are going to make brands more personal to their customers. You can get to know them better; you can learn more about them; you have more selling opportunities.”
Enterprise clients can already see myriad uses in health care, training, education and manufacturing. But this intense business interest hasn’t translated to consumers. While awareness of the technology has doubled, the number of engaged and regular users still hasn’t reached critical mass, with too few users to enjoy the immersiveness of it all.
Enter Oculus, a pioneer of the new generation of VR technology and one of the largest VR platforms today. At the conference, it explained to an audience of developers how it plans to nab more eyeballs.
The multilayered strategy — a mix of hardware, software and pricing announcements — looks like the firm’s top brass sat down, made a list of VR’s biggest criticisms and then attacked them one by one.
Blau laid out the reasons for the lack of traction: It has everything to do with high prices, not enough quality apps or experiences, and consumer education and access. “[People] don’t know the tech and have no easy access to it,” he said. “They don’t know where they can get it or even what to do with it.”
Ironically, the Facebook-owned company’s biggest problem is that it isn’t connecting. So, to solve that and reach its extremely ambitious 1 billion-user goal, Oculus unveiled new hardware, more affordable pricing, new experiences and a new push to make VR more social.
The company has a lot to prove and not just to VR critics, but to its parent company. Facebook surprised the industry when it doled out $2 billion for the startup three years ago, twice what it paid for photo-sharing app Instagram. Analysts predict Instagram will pull in $3.92 billion in revenue this year, a far cry from the $7 million Oculus is expected to generate.
Now the VR outfit hopes it has a winning formula. It just introduced Oculus Go, a new stand-alone device that’s basically an upgraded version of Samsung’s Oculus-powered Gear VR, but minus the need for a phone. Facebook chief executive officer Mark Zuckerberg called it “the most accessible virtual reality experience we’ve ever built.” Over the course of the nearly two-hour presentation, the word “accessible” came up frequently.
Potential customers turned off by the high cost of Oculus’ early tech, which reached as much as $1,500, could find the Go’s $199 proposition tempting. The brand also slashed the bundle for its flagship Rift and Touch controllers for the second time this year, bringing the price down to $399.
Some people have found the motion and immersive visuals of VR too disorienting, or even nauseating, so the company designed Go with better lenses and an improved hi-res display. The unit also features “spatial audio,” for more realistic, directional sound that can help users orient themselves in the virtual world. It can also play audio without headphones, so nearby friends can hear the action.
The feature points to another issue: the feeling of isolation that comes with sealing off the senses with goggles and headphones. The company wants to break through that isolation, so it now allows users to invite friends into certain virtual experiences, collaborate on 3-D designs, or record what’s happening in the virtual world — even live-stream it — and post it directly on Facebook. By sharing with friends and family members, users become evangelists of Oculus VR, boosting its profile and exposing it to more people, even those without headsets.
Not coincidentally, Facebook also revealed its support for interactive 3-D posts. The social network already works with 3-D posts, but the interactions are limited to just looking around. The new support lets friends do more like, say, swing open doors on a virtual truck or interact with other items. Think of it as a 2-D taste of the VR experience.
The increased exposure is essential to VR adoption. One of the biggest challenges for fans eager to share what they’re doing “in-world” with outsiders has been the inability to capture its essence with words. The most overused phrase to describe VR may be “it’s hard to describe — you just need to experience it.”
“People don’t know what they don’t know, and VR is a very difficult thing to explain,” said Carolina Milanesi, an analyst at market research firm Creative Strategies. “Think of explaining what being in Paris would be like. It’s not the same as being teleported to Paris.”
For another example, Milanesi points to Asia, and its spate of VR cafés. “In China, you can go experience VR for half an hour for about $15. We don’t have that here.” The U.S. market can only dream of Asia’s expected growth: Last year, market research firm IDC estimated that China’s global revenue for VR and AR will go from $5.2 billion in 2016 to $162 billion in three years.
Social VR looks like Oculus and Facebook’s answer to Asia’s brick-and-mortar VR cafés. For the ad-driven parent company, there’s another bonus: The new features could bring expanded opportunities for creative marketing campaigns.
The updates don’t end there. Oculus rebuilt its VR command center into a slick new space. Oculus Dash addresses frequently requested feature — the ability to use PC programs inside the VR environment — and sets it inside a futuristic, “Minority Report”-like environment. Users can manipulate documents, chat with friends in their favorite messenger apps, jump from one software program to another and invite friends to collaborate on, say, design work or other projects within Dash.
Oculus Home provides a virtual living area and some starter furnishings, so users can personalize it and even host gatherings. The scenario seems to leave a door open for future branding campaigns from home decor companies or retailers.
Opportunities like that ride shotgun to the technical updates, but only if the tech company can mobilize serious consumer interest. Oculus is clearly throwing everything it can at the cause. If it succeeds, then its platform will meet a ready base of advertisers, chomping at the bit to turn the virtual world into real business.